Introduction

Abstract

The coming structural changes in the electric utility industry require that market participants change the procedure by which both financial and oper-ational decisions are made. This book presents methodologies by which such decisions may be made optimally. To the best of the authors’ knowledge, this book is the first text to present dynamic programming (DP) [1] methods for decision problems in power systems using a stochastic framework. Pre-vious work [2, 3, 4] has addressed deterministic problems in the regulated utility environment. Recent publications [5] have focused on the deregulated electricity marketplace, including the topics of price modeling and predic-tion, futures market strategies, and risk management; however, optimization problems with inter-temporal effects that require DP-based solution methods have not been addressed.